Oddo TMT Forum Paris, May Nicolas Dufourcq CFO

Transcription

1 Oddo TMT Forum Paris, May Nicolas Dufourcq CFO

2 Agenda 2006, 2007 and beyond The new Financial Services Business Unit 1

3 In 2006, Capgemini has recorded very solid progress Double digit growth for our 4 disciplines Consulting Services Technology Services SOGETI Outsourcing Services* TOTAL GROUP FY 06 / FY ,3 % + 12,8 % + 10,4 % + 12,6% + 12,1 % * Revenue CS/TS related to Mega deals (HMRC, Schneider & TXU) reclassified in CS/TS In M Doubling operating margin and net result Operating Margin x2 447 (5,8%) (3,2%) Dividend : + 40 % Net Result Optimized cost structure and delivery Cost of services rendered Selling Expenses General and Administrative Expenses Operating Margin - 0,4 pt -1 pt - 1,2 pt + 2,6 pt Priorities executed CONFIRM NORTH AMERICAN TURNAROUND IMPLEMENT MAP INITIATIVE FOCUS ON ADDING VALUE TO CLIENTS 2

4 and has set itself ambitious 2007 Objectives Improve operational efficiency Focus on low performing units Further MAP roll-out Favor offshore margin accretion Develop NA New leaders development Grow Consulting Services Additional vertical offers Grow offshore leverage 1:3 Leverage Kanbay Integration FSI (NA, UK, test Continental Europe) Non-FSI: regional adjustment India harmonization Prepare for step changes in Consulting BPO This will lead us to: 9% growth & 7.0% operating margin in 2007 above market growth & 8.5% operating margin in

5 Q1 was another strong quarter across the board Consulting / Technology Services Kanbay Local Professional Services CS / TS / LPS / Kanbay Outsourcing Services TOTAL GROUP Q1 07 / Q % 1.5% 4.6% 3.7% 4.8% 4.1% Q1 07 / Q % 26.9% 8.1% 12.0% 18.1% 14.2% At constant rates and perimeter, including Kanbay 4

6 M Bookings up 14% yoy in Consulting, Technology and Local Professional Services point to sustained growth Outsourcing CS / TS / LPS Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 At budget rates, constant perimeter and excluding Kanbay 5

7 Charge-out rates Pricing is solid even though adding offshore dilutes the average Consulting Local Prof Svces Technology Svces India included Technology Svces India excluded At constant rates and perimeter, excluding Kanbay

8 But the leverage is stronger than it seems Average salary increase onshore : 4% Average salary increase offshore : 14% Group average remuneration cost evolution : -3.4% Onshore average remuneration cost evolution : -1.0% India average remuneration cost evolution : -13.5% CSS / VP ratio excluding India : CSS / VP ratio including India : COR P&C excluding India : +2.4% ADRC P&C excluding India : +0.2% COR P&C including India : +0.4% ADRC P&C excluding India : -1.8% 7

9 Agenda 06, 07 and beyond The new Financial Services Business Unit 8

10 Capgemini and Kanbay bring together unique, but highly complementary capabilities Clients: Access to significant client base Offers: More focused on business offers E.g., assessing banking multi-channel management Geography: Strongest in Europe Delivery: Local presence Positioning: Global presence Access to talent in India: Mumbai, Bangalore, Kolkata Clients: Ability to create long term relationships Offers: More focused on technology offers with domain strength E.g., cards processing Geography: Strongest in North America Delivery: One-team global delivery model Positioning: Domain knowledge down to the keyboards Access to talent in India: Pune, Hyderabad, Chennai Combined Capabilities Deliver end-to-end industry solutions (business and technical) capabilities to clients around the world, specifically in the Financial Services Provide our services seamlessly in one-team global delivery model 9

11 End-to-end solutions cover the spectrum of Financial Services client needs Deep Vertical Knowledge: Down to the Keyboard Banking, Insurance and Capital Markets Management Consulting Technology Integration Application Development Outsourcing & Maintenance Transformational BPO End-to-End Solutions Offering Global Rightshore Delivery Platform Improving operational efficiencies beyond cost: Transcend Technology cycles Advise and deliver business and technology solutions to address management issues 10

12 From sector expertise From benchmarks to best practices, global or local, Capgemini brings the latest in industry innovation and insights with 4 global reports to help organizations be more competitive and responsive to market demands. WORLD RETAIL BANKING REPORT WORLD WEALTH REPORT WORLD PAYMENTS REPORT WORLD INSURANCE REPORT Download reports at 11

13 To industry leading next generation delivery model Next-Gen value based global delivery model Transformational solutions through pooling of industry & technology ogy capabilities Business Agility by true Integration with client s s business & people Value derived from innovation, speed to market, risk sharing and focus on providing the appropriate Total Cost of Ownership (TCO) Highly sustainable competitive advantage Providing IT development, Outsourcing, & Business Process Outsourcing Value-Based Global Delivery Model Engagement-based delivery leveraging human assets High value technology solutions Integrated usage of near-shore, onsite, offshore and client teams to maximize leverage over 1:4 Value derived from TCO perspective Competitive advantage sustainable only in short term Integrated Global Delivery Model Transactional project based onsite-offshore delivery model Move commodity work to low cost centers Cost-per per-hour versus TCO mentality Value derived from labor arbitrage Competitive advantage not sustainable Basic Global Delivery Model 12

14 Allow to build lasting relationships through collaboration Reduced Time to Market Global Expansion Reduced Business & Operational Risk Higher Business Agility Lowered TCO Responsive Resource Mgmt. Increasing Business Value Basic Governance Flexibility & responsiveness Consistent Quality Domain expertise Vendor Staff Augmentation Headcount on-demand (primarily onsite) In time resource availability assured Align model with client business strategy Ensure success of relationship transforming projects Coverage Preferred Vendor Transactional, non-critical offshoring Individual teams service separate business units Headcount and limited project-based time & materials and/or fixed bid Quality & cost of resources assured Highly Integrated teams Innovation Knowledge management Valued Partner Aligned teams, transformational projects Centralized teams managed across many BUs Extension of customer team into a lower cost talent pool Quality & cost of projects assured Accelerators Strategic Partner Multi-layered relationships, shared goals Strategically-aligned partners willing to share goals, risks and rewards Blend alternate channels of services delivery to create a highly adaptive model Quality & cost of engagement assure Timelines Short Term Mid Term Long Term Managed Growth 13

15 The integration process is fully on track Maintain highest levels of Customer Satisfaction while preserving g and leveraging Kanbay deep domain expertise and growth momentum Provide the same high quality services our customers expect. Business as usual Enhance clients experience as we integrate our product offerings and technological capabilities Financial Services India Platform to be leveraged by Capgemini European clients 2007 February 15 th Capgemini Year End Results Announcement Closing Date February 8th February Integration Phase I Begins February 21 st March April 2 nd FS SBU launched March 9 th Phase II Implementation plan Integration Balance of

16 Agenda 06, 07 and beyond The new Financial Services Business Unit 15

17 IT Services today: a tale of two worlds % Revenue Growth 50% 40% 30% 20% 10% #1 Listed European IT Services Company 1 st European to move massively offshore: +92% 2006 Q1 07 continues growth momentum: +18% revenues Capgemini Logica EDS Accenture Tata Infosys Satyam Wipro Patni 0% ATOS 5% CSC IBM 10% 15% 20% 25% 30% -10% Operating Margin % Rankings Gartner IT Services Worldwide Market Metrics Database April 2007 Kathryn Hale. 16

18 The landscape is due to change 25% Price Pressure Revenue, Growth & Margin % Revenue Growth 20% 15% 10% 5% Global Western Leaders Offshore Players Operating Margin 0% -10% The Pack 5% 10% 15% 25% Operating Margin % 17

19 An in-depth transformation is needed Industrialization New operating model Innovation Independence Domain Experts Cost Value Add Intimacy New relationship model 18

20 Industrialization will drive us towards the right model Offshore leverage 60-80% BPO Kanbay Model 2: KPI alignment Model 3: strategic partnership 30-60% NA Model 1: people NLassignment Fr UK 0-30% LPS One Team Capacity Capability Partnership 19

21 With operating Margin improvement from all P&L components Revenues Offshore centric offers (SAP, BPO, IM, etc ) Direct costs Offshore leverage increases in TS from 15% to 35% Reduction of the blended ADRC Indirect costs Bench expansion in offshore countries SG&A Business Development and Support Functions moved offshore 20

22 And requires a deep transformation of our organization Onshore 3% 5% 6% 1% 1% Offshore Onshore transformation Transfer of bench and contractors offshore Sector expertise, engagement management, architecture, functional design 10% 9% 1% 2% Innovation 16% 14% 2% 4% 27% 22% 13% 12% 3% 12% 9% 25% Offshore transformation Stronger client and project management capabilities Moving from a capacity to a capability management logic 21

23 But can be done smoothly assuming benign market conditions Billing consultants Onshore 54,300 (80%) +3% y/y 60,000 (60%) Subs Offshore Subs 13,300 (20%) +32% y/y 40,000 (40%) 67,600 FTE 100,000 FTE 22

24 And requires standardized processes, methods and tools EARS Service Management Primus Intranet ProblemMgtChange MgtBusiness Bus.AnalysisKnowledgeMgt Processes Request Change Process Analyse Change Test Deploy Capgemini Capgemini Deliver & ITIL ITIL Best Best Practices Practices Configuration Management Demand Supply SupplyManagement Gamma CMMi Quality Management Service Global processes for sales, delivery, knowledge, risk, staffing, people management Onshore Offshore Centre Management Tools/Process Methods Capgemini s proprietary DELIVER TM 2.0 methodology Distributed Delivery Frameworks for SAP, Oracle, BI, Testing, ADI, etc Tools Collaborative tools, enabling sales & delivery from multiple locations 23

25 Conclusion: a strong ambition and the means to it Strong momentum sustained in 2007 We are actively preparing the Capgemini 2010 format We want to be one of the 5 industry shapers Sustainable Performance Throughout the Cycle 24

26 Oddo TMT Forum Paris, May Nicolas Dufourcq CFO